As the markets faced some selling pressure on the third consecutive session, some pockets performed quite well today. One stock among such was Dhani Services Limited. It is a small-cap company with a market capitalization of INR 2,386 crore and the stock is almost 4.8x more volatile than Nifty 50.
The company offers digital healthcare and digital transactional finance through its Dhani app in India. today, the share price of Dhani Services surprised investors as the stock jumped by a massive 15.3% to INR 48, retracing a bit from the day’s high of 48.15 which is a new 52-week high.
Image Description: Daily chart of Dhani Services with volume bars at the bottom
Image Source: Investing.com
When looking for a strong breakout, investors also tend to see the supportive volume figures which in this case is quite impressive. A total of 41.6 million shares exchanged hands today, which is 520% higher than the 10-day average volume of 6.71 million shares. This sharp volume increase with the price move has increased the sustainability of the trend.
Coming to the breakout, the stock surged past its falling trendline resistance on the daily time frame. As this resistance is now out of the way, the trend can now be deemed to be positive and investors can start hunting for long opportunities from hereon.
Technically, the next hurdle is present around INR 60, which gives a good runway of INR 12 or 25% from the CMP. And because it is a volatile counter, these price levels might come on the screen sooner than expected.
To manage the risk, the nearest support level that can be used to place stop loss is the swing low of INR 39.5. As long as this low is intact, traders should not worry about the trend direction of their long positions.
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X (formerly, Twitter) - Aayush Khanna